By Jason Oshins, Financial Advisor, MBA
As I view the world around me, I often consider the following question: “If we designed this from scratch, how would it look?” And frequently, it wouldn’t resemble what currently exists. How would, say, the airline industry look? What would be the structure of healthcare? Would women wear heels and men wear ties? If we could get thoughtful, provocative pragmatists in a room, what would they create?
I often think about how this relates to financial planning – estate planning, investment planning, retirement planning, and insurance planning. In this article, I begin with the aforementioned question, “If we designed this from scratch, how would it look,” and I share some of the ideas of what we would want to accomplish. While I approached it from a blue sky perspective – what would we want? – I was sure to avoid making it pie in the sky. After all, for this article to be practical and relevant, it needs to be grounded in reality. So, for example, I don’t say, “I will have all the money in the world and will never get sued or injured, and nothing unexpected will ever occur.” For each, I begin with a general comment that addresses what plagues many – if not most – clients we encounter. Grounding the assessment in reality, I then create a declarative statement for each, describing what – given a choice – clients want.
The issue: many people under plan, inadequately plan, or don’t plan at all for fear of losing control of their estate, running out of money, or encountering too much planning complexity
Declaration: “I want my assets to go to the people and organizations of my choice, when I want them to go there, and under the terms of my choosing, while being protected from lawsuits along the way.”
The issue: many people don’t achieve market returns, they take unnecessary risk, and they buy and sell based on emotion
Declaration: “I want a globally-diversified and academically-sound portfolio, which enables me to obtain returns commensurate with the level of risk I can tolerate. Furthermore, I want to remain disciplined and emotionally disconnected. This will enable me to avoid natural inclinations to buy and sell based on greed and fear.”
The issue: many people get to retirement and employ the strategy of only spending interest earned by their assets, fearing running out of money; furthermore, their estate is over-concentrated in qualified accounts like 401(s) and IRAs, which will be taxed upon distribution
Declaration: “I want to accumulate assets in both taxable and tax-advantaged vehicles through disciplined savings, and I want to position these assets so they can be fully accessed and enjoyed without the fear of running out of money or compromising my quality of life. Additionally, I want to build in adequate income and replacement guarantees to increase peace of mind and enable access to and enjoyment of these assets.”
The issue: many people are underinsured, which leaves them and their loved ones highly vulnerable to unexpected life events
Declaration: “I want to fully indemnify against death, disability, long term care requirements, and lawsuits, in such a way that if and when one of these occurs, my family and I will have as close to the financial existence as would occur absent the loss.”
As planners, I believe that we should begin with each declaration above as our starting point. Frequently, our clients aren’t aware of what’s possible, which means they often fall significantly short of optimal. Our job is to provide proper context, so they can make informed, grounded decisions. We should strive for what’s possible, and back away from there… if necessary. The declarations, as written, might appear blue sky. However, tools and products to accomplish these do currently exist. These include estate planning techniques, mutual funds, retirement plans, life insurance, annuities, disability insurance, and long term care insurance. Our responsibility, as planners, is to leverage these and assemble them in a way that enables our clients to achieve these objectives. Simple? No. Possible? Absolutely.
ABOUT THE AUTHOR
Jason Oshins is a Financial Advisor with Wealth Strategies Group. He works closely with clients throughout the country to increase wealth during lifetime, improve income during retirement, and provide a greater legacy upon passing, while also protecting their estate from taxes, inflation, and market volatility. He specializes in the areas of estate planning, investments, retirement planning, insurance planning and design, disability protection, long-term care, wealth transfer, and business planning. Jason obtained his MBA from the University of Michigan in Ann Arbor. He can be reached at (702) 735-4355 x 218 or at firstname.lastname@example.org.
OTHER ARTICLES IN THIS ISSUE
- PRACTICE-BUILDING: Six Big Mistakes When Choosing an Associate Attorney By Philip J. Kavesh, J.D., LL.M. (Taxation), CFP®, ChFC, California State Bar Certified Specialist in Estate Planning, Trust & Probate Law
- FINANCIAL PLANNING: The Top Six Estate Planning Concepts Your Future Ex-Spouse Doesn’t Want You to Know About By Steven J. Oshins Esq., AEP (Distinguished)
- TAX PLANNING: Are Your Clients (And Their Older Relatives) Wasting Their $5.45 Million Coupon To Increase Tax Basis? Edwin P. Morrow III, J.D., LL.M. (Tax), CFP®, RFC®
- IRA & RETIREMENT BENEFIT PLANNING: ASK THE EXPERT: Answers to Common Questions About IRA Trusts By The Ultimate Estate Planner, Inc.
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